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Print Media: Newspapers find Monster under bed

Newspapers look likely to leave this recession later than other media and with a smaller share of the ad pie, a wide range of analysts say.

Neither of these are new trends. What's more troubling, said one analyst, is that one of newspaper's longtime betes noires-online classified aggregator Monster (www.monster.com)-is finally poised to slow the recovery rate for newspapers (see related story, P. 1). TMP Worldwide's Monster, which posts online help-wanted ads aimed at a national audience, took on newspapers' local market classifieds' monopoly last month by launching a locally aimed service in Cincinnati.

"The next cycle peak in newspapers' help-wanted [classifieds] will be below its last cyclical peak," said Peter Appert, newspaper analyst with Deutsche Bank Securities.

TOP GENERATOR

Help-wanted is the largest segment of classified ads, itself a of newspaper revenue.

Ad data for newspapers this year is mixed. National newspapers-comprising The New York Times, Gannett Co.'s USA Today and Dow Jones & Co.'s The Wall Street Journal-continued to post year-over-year ad losses through February, according to Taylor Nelson Sofres' CMR, with ad revenue off 9.8%. Local newspapers-a much bigger category-fared better, up 4.9% for the two months (see chart, P. 57). Newspapers in 2000 accounted for 20% of U.S. advertising, according to the Newspaper Association of America, down from 25.1% in 1990.

competition takes toll

Newspapers still dominate classifieds, but the recession and online competition are taking a toll. Newspaper classifieds revenue last year fell 15.2% to $16.6 billion, according to the Newspaper Association of America; the help-wanted category slumped 34.5% to $5.7 billion. Classifieds last year accounted for 37.5% of newspapers' $44.3 billion in ad revenue.

It was a different story at Monster, whose revenue last year soared 41% to $535.8 million. "We think the vast majority of the current downturn is related to the economic cycle," said Tim Landon, president of Tribune Co.'s Tribune Classified Services. But "we think about 20% of the downturn is related to the Internet and the new competition." Tribune's classified linage last year fell 18% to $1 billion.

Even among analysts, Mr. Appert's view of Monster's clipping newspapers' next peak is not universally held. Ed Atorino, an analyst with Dresdner Kleinwort Wasserstein, said that for years Monster has "had the game to itself," essentially, facing competitors he termed "underfunded" like HotJobs.com and Headhunter.net. Now, Mr. Atorino noted, Yahoo! owns HotJobs while Tribune and Knight Ridder have combined Headhunter.net, acquired late last year, with their shared service, CareerBuilder (www.careerbuilder.com).

`The sTrong Guy'

"Newspapers will be very tough" to take share from, especially locally, said Mr. Atorino. "Now [Monster] goes against the strong guy."

Newspapers, virtually all of which offer online classifieds, have made efforts to come up with a national online classified solution of their own, but unseating Monster remains a goal unfulfilled. Nielsen/NetRatings data show the combined traffic of Headhunter.net and CareerBuilder grew more slowly than Monster over the past 12 months; their combined traffic of 3.2 million unique visitors last month was less than one-third of Monster's. Mr. Appert's figures show online classifieds' share has grown to 13.1% this year from 2.9% in '99.

Meanwhile, newspaper observers nervously eye Monster's Cincinnati campaign and its first entry into local help-wanted ads. "The next stage is much more threatening," said Mr. Appert.